BALA CYNWYD, Pa., April 29, 2003 (PRIMEZONE) -- The following statement was issued today by the law firm of Schiffrin & Barroway, LLP:
Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Southern District of Florida on behalf of all purchasers of the common stock of Gainsco, Inc. ("Gainsco" or the "Company") (OTCBB:GNAC) from November 17, 1999 through February 7, 2002, inclusive (the "Class Period").
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Schiffrin & Barroway, LLP (Marc A. Topaz, Esq. or Stuart L. Berman, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at info@sbclasslaw.com.
The complaint charges Gainsco and certain of its officers and directors with violations of the Securities Exchange Act of 1934 (the "Exchange Act"). More specifically, complaint alleges that during the class period defendants issued false and misleading statements to the marketplace that artificially inflated the price of Gainsco's shares. On November 17, 1999, Gainsco, an insurance holding company, announced that it would acquire Tri-State, Ltd.'s privately-owned insurance operation which specialized in nonstandard passenger automobile insurance. According to CEO Anderson, the Tri-State acquisition marked the Company's expansion of its passenger auto insurance business that began with Gainsco's earlier purchase of Miami-based Lalande Group. Anderson also told the public that the Company would integrate Tri-State's business with Lalande Group's underwriting and claims systems "to maximize service and cost efficiency." The transaction was expected to be "minimally accretive to earnings in 2000."
The Company's second-quarter Form 10-Q, filed in August 2000, stated that Gainsco had paid $1.15 million to Tri-State's former owners "based on a conversion goal and specific profitability targets," and falsely lulled the investment community into believing that Tri-State was profitable, when in fact it was not. Gainsco continued to issue highly positive statements throughout 2000 and 2001 and assured the public that it was resolved to "maintain a strong, disciplined balance sheet." On August 9, 2001, however, the Company announced that it was selling the agency operations of Tri-State and would take a $5.1 million write off from its original $6.0 million investment in Tri-State. This, however, was only a partial disclosure of Tri-State's problems and led investors to believe the worst was behind the Company. On August 14, 2001, the Company announced that it would sell Tri-State to its president, Herb Hill, for $900,000. On February 7, 2002, the end of the Class Period, Gainsco announced that it would discontinue writing commercial lines insurance business due to "adverse claims development and unprofitable results." Gainsco's stock declined substantially on the news.
Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin & Barroway, which prosecutes class actions in both state and federal courts throughout the country. Schiffrin & Barroway is a driving force behind corporate governance reform, and has recovered in excess of a billion dollars on behalf of institutional and high net worth individual investors. For more information about Schiffrin & Barroway, or to sign up to participate in this action online, please visit http://www.sbclasslaw.com/currentcases.cfm.
If you are a member of the class described above, you may, not later than June 27, 2003, move the Court to serve as lead plaintiff of the class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements.
CONTACT: Schiffrin & Barroway, LLP Marc A. Topaz, Esq. Stuart L. Berman, Esq. Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 1-888-299-7706 (toll free) or 1-610-667-7706 Or by e-mail at info@sbclasslaw.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca